By: Arun Chogle, Client Business Partner, Nielsen India
Making a case for Brand Stretching
- 30% of revenue of top 23 FMCG most trusted brands come from Brand Stretch
- A Brand Stretch has five times more likelihood of success compared to all new launches
- Brand Stretch helps leverage equity, spend efficiency and have faster consumer adoption
Extending brands have become increasingly important in the last decade of consumerism as new product launches have gone up substantially. Moreover, a weak economic environment and inflationary pressures are forcing CEOs and marketers to come up with innovative ways and means to search for profitable growth.
A Nielsen survey across a sample of India Inc., has found that marketers have today realized that having fewer but larger brands makes a lot more business sense. This shift is visible as many companies have caught the brand stretching bug, seeing it as a cheaper and less risky way compared to creating new brands.
In India’s FMCG market which was about Rs 1,67,000 crores in 2011, brand extensions are estimated to contribute nearly 30 percent based on the sample that Nielsen studied. Past studies have shown that while new launches account for an approximate 10 percent success rate, Nielsen’s recent study shows the figure at nearly 50 percent for brand stretches – a clear indication of the opportunity this space presents.